Captive power generation is plagued with some issues. The main idea behind setting up solar based captive power plants was to get uninterrupted power supply and reduce the diesel cost. Industrial users who have the required resources to set up their own power plants for internal consumption can put up SPV captive power plant. But, there are certain issues in setting up solar based captive power plants.

Uncertainty in weather: The design of a solar power generation system involves either the use of historical weather data or weather forecast methods to predict the future temporal evolution of the solar energy system. Despite the use of such methods, the behavior of weather conditions always involves high uncertainty. Unless such uncertainty is accounted for during the system design, the performance of the solar-based system will only be optimum within the range of the considered weather conditions. Potentially unpredictable weather fluctuations will inevitably result to suboptimal system operation.

Solar irradiance: Solar irradiance is one of the most important factors in the operation of the PV systems and it can have a significant impact on the efficiency and power quality response of the whole system. The variable power flow due to the fluctuation of solar irradiance and temperature are some of the parameters that affect the power quality of photovoltaic systems. With high connection densities of photovoltaics in the distribution grid, low irradiance can lead to undesirable variations of power and supply quality (voltage and current) at the connection point which might even exceed acceptable limits. The system injects a highly distorted current (with respect to the fundamental frequency current) to the distribution network during low solar irradiance conditions. It has been found that low solar irradiance has a significant impact on the power quality of the output of the PV system.

Initial Cost: The high initial cost of solar PV systems is one of the most significant barriers to PV adoption. However, as the initial cost of PV system decreases and the cost of conventional fuel sources increases, these systems will become more economically competitive.

Surplus Power: In India, net metering system is currently not available and thus the surplus power generated from renewable energy sources cannot be sold to the utilities. When it is not connected to the grid, excess energy that is generated is not fed out to the utility to give you an energy credit (this can happen with on-grid systems). Off-grid systems must use the surplus or lose it.

Energy Storage:Offgrid PV systems typically use batteries for storing energy, and the use of batteries could increase the size, cost and complexity of the system.

Education: PV systems present a new and unfamiliar technology; few people understand value and feasibility. This lack of information slows market and technological growth.